Tuesday, May 19, 2009

Andrew Martin / New York Times:Credit Card Industry Aims to Profit From Sterling Payers — Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards …

related:Colin Barr / Fortune:The Credit Card Company Everybody Hates -- Facing soaring losses, small business credit card lender Advanta is shutting down accounts and tells investors it will try to wait out the downturn...

So say economists including Gregory Mankiw, former White House adviser, and Kenneth Rogoff, who was chief economist at the International Monetary Fund. They argue that a looser rein on inflation would make it easier for debt-strapped consumers and governments to meet their obligations...

“I’m advocating 6 percent inflation for at least a couple of years,” says Rogoff, 56, who’s now a professor at Harvard University. “It would ameliorate the debt bomb and help us work through the deleveraging process.”

"Mankiw says the central bank should pledge to produce “significant” inflation. If Americans were convinced of the Fed’s commitment, they’d buy and borrow more now, he says." ....

discussion:Kevin Depew / Minyanville:5 Things for Tuesday... -- So whenever I hear someone make a case for higher inflation as a means of "helping the economy", what I see is someone standing on a whiskey barrel in the town square, peddling snake oil - fer all that ails ye.

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Angela Monaghan / Telegraph.co.uk:Britain sinks into deepest deflation since 1948 -- The British economy sank deeper into deflation last month to the lowest level in more than 60 years as the effect of falling house prices and lower mortgage repayments escalated...

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Calculated Risk:Housing Starts at Record Low in April -- Total housing starts were at 458 thousand (SAAR - Seasonally Adjusted Annual Rate) in April, the all time record low. The previous record low was 488 thousand in January (the lowest level since the Census Bureau began tracking housing starts in 1959).

Single-family starts were at 368 thousand (SAAR) in April; just above the revised record low in January (357 thousand)...

GM bankruptcy plan eyes quick sale to gov't — General Motors Corp's (GM.N) plan for a bankruptcy filing involves a quick sale of the company's healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday...

Michelle Malkin:Obama's $1,300 car tax -- Nobody in the White House is going to call the president’s “mileage and pollution” plan what it is.

It’s a $1,300 car tax. On the working class. On the middle class. On everyone who has responded to the government’s consumption-mania incentives — loosened credit, tax deductions — and bought/planned to buy a new car without taking into account these unanticipated costs...